By
RICHARD A. FINEBERG
July 14, 2007 *
The Joint Pipeline
Office (JPO) is an umbrella group consisting of a dozen state and federal
agencies that came together in 1990, in the wake of the Exxon Valdez oil
spill, to provide coordinated agency focus on the Trans-Alaska Pipeline
System (TAPS). The 800-mile pipeline connecting the North Slope to Valdez
is owned primarily by the North Slope's major producers through the Alyeska
Pipeline Service Company, which was established in 1970 to build and operate
their pipeline.
When the JPO's Executive
Council -- the group of parent agencies whose pipeline people work in
concert at JPO -- met in Anchorage June 13, it looked like a typical gathering
of bureaucrats. But the meeting, held on a bright summer day in a windowless
room at the back of the Alaska State Library's basement office in downtown
Anchorage, was extraordinary. The council, which used to meet at least
once a year, had not met for more than five years.
Two Elephants in
a Windowless Room
That day, there were
two elephants in the room. One was the huge regulatory loophole that government
officials had somehow overlooked for three decades. Until a transit line
linking Prudhoe Bay to TAPS sprung a leak last year, the safe operation
of North Slope field pipelines had resided in something of a regulatory
limbo. Major TAPS owner BP later said it maintained some 1500 miles of
pipelines in the Prudhoe Bay area. In the wake of BP's problems, both
state and federal monitors discovered regulatory powers they never knew
they had; to close the remaining regulatory gaps, they also established
new authorities.
Regarding the recent
emergence of new oversight and enforcement powers, former Alaska Department
of Environmental Conservation (ADEC) monitor Dan Lawn points out that
adequate regulatory authority had existed all the time. To support this
point, he cites two provisions of state law:
- The statute outlining
the mission of ADEC, which says, that it is the policy of the state
"to conserve, improve, and protect its natural resources and environment
and control water, land, and air pollution, in order to enhance the
health, safety, and welfare of the people of the state and their overall
economic and social well-being." (As 46.03.010.)
- Statutory requirements
that oil facility operators establish a detailed oil spill prevention
and contingency response plan ("C-plan"), including the ability
to implement that plan. (As 46.04.30.)
The second elephant
in the room when the Executive Council met was the TAPS Strategic Reconfiguration
project (SR). Currently in process, SR is a major overhaul of the 30-year-old
pipeline to automate the entire pipeline and convert its pump stations
from pumps powered by jet engines to newer, electricity-driven motors.
TAPS crosses mountains, valleys and streams that are worthy of the highest
level of environmental protection and the oil the pipeline carries constitutes
a significant portion of the West Coast's oil supply. Therefore, the SR
program deserve close scrutiny. But with major attention focused on the
North Slope since the oil spill and resulting partial shutdown of Prudhoe
Bay last year, few people outside the TAPS world seem to have noticed
that the SR project was significantly delayed and over budget. Within
that world, it is painfully evident that Alyeska bit off more than it
could chew.
The June 13 Executive
Council meeting was chaired by the representatives of the JPO's wheelhorse
agencies, the federal Bureau of Land Management and state Department of
Natural Resources. But the lead agencies didn't call this meeting. It
was convened by a matter-of-fact guy with an impossibly long handle and
two jobs: Vice Adm. Thomas M. Barrett (U.S. Coast Guard, Ret.), who is
both the head of the U.S. Department of Transportation's Pipeline and
Hazardous Materials and Safety Administration (PHMSA) and the Acting Deputy
Secretary of the federal agency.
The retired admiral,
who took over the newly reorganized PHMSA in 2006, immediately earned
high marks for cutting through rhetoric with his frank criticism of BP's
failures on the North Slope and his intelligent approach to looking at
how pipeline regulators can best ensure that the industry delivers its
commodities safely. In light of his unusual, dual responsibility for running
the federal pipeline safety office while overseeing the nine other units
of the Department of Transportation, it is noteworthy that Barrett came
to Alaska and spent the day at the June 13 meeting. He was accompanied
by the agency's chief field safety officer and the head of the Denver
field office, to which PHMSA's Alaska representative reports.
Barrett says that
he is fact-driven. This attribute will stand him well in dealing with
the problems in Alaska, where basic facts about petroleum development
in remote locations can be difficult to come by. Most of Alaska's petroleum
development occurs in remote regions, where events in the field may be
very different from the spin that politicians, industry representatives
and regulators often apply to those developments. Unraveling the problems
associated with TAPS Strategic Reconfiguration may be one of his toughest
challenges.
The difficultly one
encounters ascertaining facts is a constant problem for those seeking
to understand the significant developments in the Alaska pipeline world
since the JPO Executive Council last met in December 2001. Those events
include: the Denali Fault earthquake in November 2002, renewal of the
state and federal right-of-way grant and lease contracts in late 2002
and early 2003, the ongoing major overhaul of the Trans-Alaska Pipeline
System (TAPS) and the field pipeline spill at Prudhoe Bay in 2006, followed
by the discovery of major corrosion problems in other pipelines at the
nation's largest oil field. In the political world, since the agencies
that make up JPO last met to focus and coordinate their efforts, Alaska
has elected two new governors, each of whom appointed new agency chiefs.
On the federal front, the Pipeline Safety Act was passed in 2002, the
U.S. Department of Transportation reorganized its pipeline unit, establishing
the PHMSA in 2005 and Congress expanded the agency's authority -- in part
due to BP's North Slope problems -- in December 2006.
The Comprehensive
Monitoring Program and Public Outreach
Each JPO agency representative
arrived at the June 13 meeting with a Powerpoint presentation that outlined
his or her agency's part in the oversight of Alaska pipelines - what the
agency had been doing and what it intended to do. The federal head of
JPO, Authorized Officer Jerry Brossia of BLM, led off with a presentation
introduced on the agenda as "JPO 101." To bring newcomers up
to speed, Brossia, who set up the JPO and led it from the state side for
five years before becoming the federal chief in 1996, painted a broad
history of JPO's operation. Should the agencies responsible for ensuring
safe and environmentally sound operations of the nation's largest oil
field and its 800-mile pipeline link to tidewater need a primer on their
oversight operations? And if they were just learning the ropes, what else
were they missing?
The original purpose
of the JPO was to coordinate permits and overlapping jurisdictions, while
aiding oversight efforts by providing more staff and authority than any
single agency could afford to monitor TAPS. Brossia discussed problems
on TAPS in the early 1990s that triggered congressional hearings and resulted
in a joint agency-congressional audit in 1993 that confirmed serious existing
and potential problems on the 800-mile pipeline. These days, he said,
"We do a lot of inspections" -- 720 per year. JPO also oversees
about 65 to 70 oil spill response exercises per year, four of them described
as "major." To handle these varied responsibilities, in 1994
JPO set up a database that tracked problems on TAPS and something called
the Comprehensive Monitoring Program (CMP).
Brossia presented
a slide showing the CMP as a triangle with three tiers. Field surveillances
by JPO monitors constitute the base of the triangle. The second level
is focused assessments targeting specific problems identified during surveillances.
A wrap-up document called a CMP report sits at the apex of Brossia's triangle.
JPO's CMP reports were designed to put issues and compliance into broad
perspective, and to serve as JPO's scorecard for its work. The umbrella
group's 2002 report on industry compliance with right-of-way grant and
lease terms, issued during the 18-month lease renewal process, describes
CMP reports as "the key scheduled outputs of JPO work plans,"
while the JPO web site states that CMP reports are produced "primarily
for stakeholders." From these descriptions and the presentation to
the Executive Council, one would never guess -- and Brossia did not mention
-- that it has been five years since JPO last published a CMP report.
(1)
Even when published,
the CMP reports left much to be desired. In 1998, this writer presented
written testimony on the shortcomings of the CMP reports to the Executive
Council. Two years later, the U.S. Interior Department's Inspector General
concluded that "JPO needs to establish an internal quality control
review process to ensure that information presented in its Comprehensive
Monitoring Program reports and annual reports is accurate and supported."
The Inspector General also noted what it described as "weaknesses
relating to tracking and reporting compliance issues." (2)
BLM acknowledged these problems and said it was taking action to remedy
them." (3) But in 2002, this writer's review of the
subsequently published CMP reports revealed that the positive results
in those reports frequently contradicted the documentary record of the
surveillances and assessments that built the report. (4)
Two of the biggest
issues JPO has confronted since its creation were the re-vamping of the
TAPS quality program in 1996 and renewal of the state and federal grant
and lease agreements in 2002. In both cases, JPO signed off, granting
approvals despite serious identified but unaddressed inadequacies in the
TAPS programs under review. (5) Ironically, during the federal
right-of-way renewal process in 2002, this writer presented testimony
-- drawn from review of the record on NASA's 1986 Challenger disaster,
in which seven astronauts died in a fiery explosion less than two minutes
after launch -- that suggested that when officials establish a system
to mitigate risk, monitors may become resistant to warning signals from
outside that system. (6) This was one of the many examples
of public testimony items ignored by officials but added to the tall stack
of critical comments used later to support subsequent claims that public
comments had been carefully considered.
The checkered history
of JPO's CMP reports and the failure to publish one in the last five years
are not the only measures of the shortcomings of JPO's outreach efforts.
For most of the day June 13, Admiral Barrett and his small contingent
of senior federal officials outnumbered the members of the public in attendance.
Since the industry's recent problems on the North Slope triggered a raft
of bipartisan congressional criticism, one cannot assume that concerned
members of the public stayed home because they were confident that things
were going well. One possible reason for the lack of public interest may
be JPO's deeply ingrained philosophy of partnering with industry.(7)
Critics -- this writer included -- believe this mindset has resulted in
a sometimes unhealthy alliance in which the government overseers often
seem to be shielding operators from public criticism rather than representing
the public. Another reason may be that with the cessation of CMP reports,
the flow of substantive public information from JPO -- often sluggish
historically -- has slowed to a trickle. (8)
Strategic Reconfiguration:
Overview
During the last decade,
TAPS has undergone unprecedented physical changes. The ten pump stations
necessary to pump 2.0 million barrels a day through the pipeline at peak
in the late 1980's have been cut in half, matching the decline in North
Slope production; a sixth station is expected to be closed at a future
date, reducing the number of operating pump stations to four. The eleventh
original field facility on the line -- a pressure relief facility on the
south side of the Brooks Range -- remains in operation. It was only after
four stations were closed that Alyeska began talking about a major overhaul
of its pumping and control facilities. Under that makeover, known as Strategic
Reconfiguration, the roaring, jet-engine powered turbines at the pump
stations are being replaced with variable speed, electricity-driven pumps
and the entire system is to be automated and controlled from Anchorage.
Recognizing that detailed
preliminary engineering is the key to successful project implementation,
when they reviewed the first SR documents some Alyeska veteran field personnel
shook their heads in disbelief. Did the engineers in their glass offices
in Anchorage and Fairbanks have any idea what they were asking? Apparently
the TAPS owners had similar questions; for several years they had declined
to grant full funding for the Alyeska program.
Despite the TAPS owners'
apparent reluctance to fund Alyeska's plan, on Dec. 16, 2003, JPO granted
formal, conditional approved to the concept of the SR program. The final
approvals necessary to begin construction would come later; to earn those
Alyeska had to provide specific information dealing with basic shortcomings
in its plan and approximately 130 general and technical items that JPO
apparently felt required additional attention before final approval could
be granted. According to the authorizing letter, at that time Alyeska's
application also lacked basic elements. The letter listed seven necessary
program elements Alyeska was lacking for SR, including: a project schedule;
a compliance matrix showing all permits and authorizations necessary to
complete a project in compliance with all laws and regulations; discussion
of design criteria and methodology to assure that the project components
would function effectively; a management of change system; and training
program to coordinate the procedures necessary to assuring a smooth transition
from the old pumping and control systems to the new, automated equipment.
(9)
In light of the general
recognition that careful preliminary planning is essential to project
success and JPO's initial misgivings, it seems paradoxical that the monitors
authorized the project before the TAPS planners had fleshed out the details
of the project and provided fundamental information about project implementation.
(10) But JPO gave the initial green light even before the
TAPS owners themselves had authorized the project. At approximately the
same time, the oversight agencies also obligingly cleared potential roadblocks
relating to the revised contingency plan for spill response with the pump
stations no longer staffed, despite unanswered questions raised by concerned
citizens and veteran Alyeska spill responders. This was accomplished withf
another condition of approval. In this case, the monitors granted conditional
approval to extensive contingency plan modifications while requiring,
as a condition of those modifications, a new risk analysis and study of
how crude oil travels in fast-moving inland streams crossed by TAPS. One
wonders: Without this seminal information, how could Alyeska plan for
these modifications? (11)
When finally approved
and funded by the TAPS owners in March 2004, Alyeska described the Strategic
Reconfiguration project as "a giant technologic leap" that requires
"the single biggest pipeline investment since construction."
When completed, "the new pump driver packages and other process equipment
will be configured for full remote monitoring and control . . . OCC [operations
control center] will then have full visibility and control over all the
components needed for safe, remote operations of the newly electrified
pump stations." Despite the fact that detailed engineering had not
been completed, equipment manufacturers had not yet been selected and
Alaska's winter could be expected to take a chunk out of construction
time, Alyeska said that the project would be completed by the end of 2005.(12)
In hindsight, a JPO staffer involved in the SR project review acknowledged
ruefully that "Alyeska tried to swallow the whole whale with one
bite."
Implementation
Delays
As the Strategic Reconfiguration
project moved forward, Alyeska ran into problems at every turn. More than
a year into the project, in May 2005 - seven months before the project
was supposed to be finished - project engineering and vendor documents
were not yet fully complete and it was clear that SR had fallen behind
schedule. At this point, although Alyeska management had to recognize
delays, project managers optimistically assumed that if all went well
the necessary pumping and control equipment could be built and installed
by July 2006 so that line-wide start-up could begin the following month,
to be completed no later than September 2006. (13) In the
field, workers were running around like Chicken Little, trying to deal
with routine maintenance and operations while building a whole new infrastructure.
Throughout 2005, JPO issued the final Notices to Proceed, as well as more
than 60 technical reports that varied widely in quality and content.
(14)
In March 2006, the
new turbine generator units, manufactured in England, were discovered
to have serious corrosion in their core shafts. Despite the fact that
the core units had to be pulled and returned to England for repair.
(For picture, click here.)
(15) The following month, Alyeska announced a project delay
due to "late engineering design delivery" and "incomplete
design scope" that make it "difficult to accurately plan field
work and complete procurement." Since "any design change after
mobilization of field contractors results in increased costs," it
was felt that a less aggressive schedule would minimize these cost risks
and would allow Alyeska time to repair the turbine generator defects.
Under the revised schedule, Alyeska still planned to put the new electrically-powered
units and their automated control systems into operation at Pump Stations
3 and 9 in 2006, along with the critical Safety and Integrity Pressure
Protection System (SIPPS), which would take over control of the pipeline's
remote valves and each pump station's relief tank system in January 2007.
Alyeska still hoped to get Pump Station 4 on-line in 2006, too, but this
time the company wasn't making any promises on the last pump station.
(16)
By late summer of
2006, it became increasingly apparent that startup of even one new pump
station by the end of that year was problematical. One worker commented
that if he were king for a day, he would summon BP executives Lord John
Browne and Bob Malone and hang them for the cost-cutting that placed such
a heavy burden on the workers charged with responsibility for implementing
management goals. (17)
With efforts now focused
on putting Pump Station 9 into operation before Dec. 31, inspectors belatedly
discovered that some of the new electrical equipment lacked proper safety
certifications because it was manufactured outside the United States:
more scrambling. Originally estimated to cost $250 million, the project
was now expected to cost twice that. Finally, in early December 2006,
Alyeska determined that "the prudent approach to ensure a safe and
quality startup of the reconfigured equipment and for the cutover to SIPPS"
would be to delay the start-up at Pump Station 9 until early 2007. This
time, a firm schedule for finishing the remaining three pump stations
was not set. (18)
While the problem-studded
SR project was struggling in the field, legislators in Juneau were receiving
testimony about the necessity of preliminary planning to prevent similar
problems on the proposed natural gas line from the North Slope. (19)
From this perspective, one wonders: Did JPO's partnering mentality lead
the pipeline overseers to o depart from conventional wisdom by pushing
SR forward in the absence of adequate preliminary work? And what were
the consequences?
A Small Fire or
a Huge Fireball - Which Was It?
On January 6, 2007,
one month before the new, automated system went into operation at Pump
Station 9, a fire - reportedly small, according to official accounts -
occurred when an unexpected pipeline shutdown triggered oil diversion
from the pipeline into the station's relief tank. As the relief tank filled
at Pump Station 9, the tank expelled flammable vapors that were ignited
by a nearby Tioga industrial heater being used to facilitate completion
of the Strategic Reconfiguration system during cold weather. Accounts
of this incident differ, depending on who you are talking to. According
to JPO's version, the fire was put out in five minutes and caused no injuries
or damage to equipment. But on-site personnel reported that the flames
rose high over the buildings and that workers on site thought they nearly
lost the station. In any event, a state Department of Labor investigation
found a number of safety deficiencies, and that Alyeska was out of compliance
with health and safety requirements. (20)
In either case, the
fire at Pump Station 9 is surprising for a number of reasons. Alyeska
has experienced numerous fire code problems at various pump station in
the past, including Pump Station 9; additionally, it should be noted that
safety requirements for using industrial heaters are clear and the dangers
of igniting petroleum fumes are well known.
None of these problems
were discussed at JPO's June 13 Executive Council meeting. Ironically,
one of the few efforts to pinpoint existing problems that threaten the
safety of the North Slope production and delivery system also spotlights
the shortcomings of the Executive Council meeting. During the state's
Division of Fire Prevention's brief presentation, the agency's representative
toi the JPO assured the Executive Council that there is a night-and-day
difference between Alyeska's current, pro-active attitude toward fire
safety and the company's former posture. However, he noted, a major problem
that must be dealt with in the future is that Alyeska had not developed
a strategy for dealing with fire hazard identification and response at
unstaffed facilities. Nobody thought to ask him why the Strategic Configuration
fire response planners apparently operated on the night side, or how this
problem got past JPO despite the monitors' specific request back in 2003
that Alyeska deliver its plan to meet fire safety and design methodology
requirements prior to issuance of notices to proceed; the January fire
at Pump Station 9 did not come up for discussion.
Start-Up
Pump Station 9 came
on-line early in February 2007 and SIPPS was activated the following month.
Since the first electric-powered pumps and the SIPPS system went into
operation, the pipeline's new control system has malfunctioned on four
separate occasions. This fact was mentioned at the June 13 meeting. But
other than to note that a risk analysis was being performed on these incidents,
additional details were not provided.
One of the control
system failures occurred March 22, when the new remote control system
diverted mainline oil into the 55,000-barrel pressure relief tank at Pump
Station 9. Official reports vary from informal accounts. JPO officials
say the SIPPS shutdown was a normal glitch of the type one would expect
from new equipment, but some on-site personnel said the new system malfunctioned,
temporarily "going blind" and failing to tell on-site personnel
what was happening. In the absence of substantive information on this
incident, it is not possible to resolve these conflicting versions of
reality; nor is it necessary. If the SIPPS system indeed malfunctioned,
it did so despite Alyeska and JPO assurances that the new safety system
would be fully tested before it went into operation. Moreover, one of
Alyeska's many 2005 technical assessments dealt with SIPPS factory acceptance
procedures and concluded that those procedures complied with requirements.
If the system did not malfunction, then the management of change and/or
training programs must have failed because the personnel claiming the
system "went blind" must have misunderstood what was happening.
Do the JPO monitors
and the Executive Council have an adequate handle on TAPS field problems?
Concern about the end product of the delayed, problem-studded and over-budget
TAPS makeover is heightened by past problems on TAPS. For example, between
1995 and 2001, as TAPS aged and regular maintenance shutdowns were scheduled,
the pipeline experienced re-start problems for seven years in a row before
TAPS operators and government monitors finally figured out that restarts
were a problem.(21) More recently, the importance of pipeline
control systems was demonstrated on the North Slope in February 2006,
when inadequate leak detection was identified as one of the major reasons
the largest spill ever to occur on the North Slope went undetected for
five days. BP's after-the-fact investigation disclosed that the leak detection
system was warning operators of the problem. But the operators thought
the warnings were false signals and simply shut off the alarm and reset
what they believed was a malfunctioning alarm system. (22)
As Alyeska put the
first electric pump station into operation, the oversight group's irregularly
published activity report cryptically commented:
JPO required a number
of items to be completed and delivered prior to system cut over (implementation)
including final commissioning procedures, evidence of qualified and
trained personnel; system security analysis; and management of change
procedures, results, and documentation. The JPO had previously issued
a Notice to Proceed approval for the new system. (23)
One oversight area
that deserves further analysis is the method by which JPO rolled the many
items requiring approval into the 22 final notices to proceed with construction.
Exactly how that approval system worked -- and how well it protected the
public interest in safe design, construction and operation -- is not clear
from information available to the public .
Oil Spill Response Plans
As noted above, the
plan to automate pump stations calls for removing personnel permanently
based at remote pipeline camps and replacing them with roving maintenance
and response teams. Since pipeline company's pump station staffs formerly
served as the first responders for oil spills and other emergencies, this
plan represented a major change in TAPS oil spill response plans. Although
Alyeska was industriously laying initial plans for Strategic Reconfiguration
during the pipeline lease renewal process in 2002, government contract
reviewers treated Strategic Reconfiguration as a hypothetical possibility.
(24) in
an administrative action that paralleled overall project permitting for
SR, the monitors put the cart before the horse. The basic studies -- an
updated risk analysis and a study of how oil travels in fast-moving streams
-- should have been done as part of the preliminary conceptual planning,
not after the fact. The area most impacted by the lack of appropriate
prior planning was the southern 150 miles of the pipeline. In that mountainous
150-mile stretch, a series of fast-flowing streams crosses TAPS and flows
eastward into the nearby, salmon-rich Copper River while earthquake potential
and discontinuous, warm permafrost create conditions that make spills
prevention and response particularly important. Alyeska decided to close
Pump Station 12, 65 miles from Valdez, and move the spill response storage
depot and personnel to Glennallen, another 60 miles north. But the move
was poorly executed, leaving this critical portion of the pipeline inadequately
protected for several seasons.
At least two current
problems in the implementation of the TAPS C-plan did not make their way
to the Executive Council June 13:
- Citizens in the
Copper River region have identified three rivers feeding the Copper
-- the Gulkana, Tazlina and Klutina -- that lack adequate spill containment
sites. The Copper River Watershed Project has calculated that in the
event of an August spill on the Tazlina River, it would take six hours
for responders to arrive at the designated containment site. By that
time, concerned citizens say, oil spilled from the pipeline would be
past that site and would be on the Copper River Flats in 39 hours. "Despite
a near consensus view of informed community members that a spill from
the TAPS is a serious threat to our environment," the Cascadia
Wildlands Project wrote in requesting an administrative hearing on the
latest TAPS C-plan, "[t]he public has been locked out of the process."
(25) To date, the Alaska Department of Environmental Conservation
staff has opposed citizen requests for a hearing on their concerns.
- With more than
half of the formerly manned pump stations closed and the remainder scheduled
to be automated, the new C-plan is increasing dependent on helicopter
transport to get equipment and personnel to spill sites quickly. But
informed sources report that not all the helicopters necessary to accomplish
this task are actually available for spill response on a full-time,
dedicated basis.
Corrosion
One of the more intriguing
pieces of information to come out of the June 13 meeting was the disclosure
by Alyeska that the pipeline company had discovered internal corrosion
at two locations on the pipeline just north of Pump Station 3 on the North
Slope. According to Alyeska, both spots were identified before they approached
the point where repair was necessary. But just to be safe Alyeska putting
a protective jacket or sleeve around both spots. The corrosion report
to the Executive Council ended there, but there's more to the story. Here
is the outline of what is known to the public.
Since corrosion was
identified as a problem on TAPS two decades ago, Alyeska has sleeved over
100 spots on the pipeline. In almost all cases, the problem was identified
as external corrosion, occurring at locations where the wrapping on the
outside of the pipe has failed, exposed the pipe to moisture. Alyeska
engineers originally thought that corrosion would not be a problem in
dry northern soils; they were wrong, and the pipeline owners have paid
over $1.0 billion in corrosion prevention and maintenance on TAPS. (26)
In contrast to the external corrosion on TAPS, internal corrosion
- identified as the cause of BP's problems on the North Slope - occurs
when deposits build up inside the pipe, allowing microbes to breed; internal
corrosion, which attacks the pipe wall much more rapidly than external
corrosion, is less apt to occur when oil flows under pressure and at a
high speed, as on the journey through TAPS to Valdez. For this reason,
while Alyeska has experienced some internal corrosion in the maze of piping
at pump stations, few incidents of internal corrosion on the 800-mile
mainline have been reported.
The failure to conduct
routine maintenance was one of the principal factors leading to the February
2006 spill and BP's subsequent discovery of corrosion problems in its
North Slope field pipelines. In testimony before Congress last September,
Alyeska and government monitors contrasted the pipeline company's regular
use of cleaning pigs -- devices dispatched through the pipeline to remove
deposits from the inside walls of a pipeline -- to BP's failure to run
pigs on the North Slope. Moreover, Alyeska informed Congress last September,
to assure that the cross-country pipeline was free of the contaminants
that caused problems on the North Slope, the pipeline company was running
its triennial inspection using a "smart pig" -- a device that
measures pipe wall thickness electronically to detect corrosion problems
-- one year ahead of schedule. (27) But the early inspection
pig run was unsuccessful due to the buildup of deposits on the inside
of the TAPS line. In fact, the deposits are so intense that a cleaning
pig broke up in the pipeline during regular maintenance pigging. (28)
As it turned out, the heralded accelerated inspection pig run
was completed on its initial schedule; at last report, the data had not
yet been analyzed. (29)
Conclusion
The three current
TAPS issues discussed here - the SR program, contingency plan and mainline
internal corrosion and pigging - are linked by this common denominator:
At its meeting June 13, the JPO Executive Council was not given sufficient
information on any of them to evaluate how JPO is handling its responsibilities.
This commentary has paid particular attention to SR because of the importance
of the TAPS makeover program in assuring safe and reliable transport of
North Slope crude oil.
As noted above, two
of the biggest issues JPO has confronted since its creation -- the 1996
approval of the quality program and 2002 approval of renewal of the state
and federal grant and lease agreements -- called JPO's performance into
question. In the absence of better current information from JPO, it is
difficult to evaluate whether government monitors, in their apparent eagerness
to expedite the project, took appropriate measures to identify and mitigate
the problems created by Alyeska's aggressive and sometimes unrealistic
approach to SR planning and implementation. From this perspective, immediate
and thorough review of the SR project approval is necessary. That review
must be transparent, and it must involve the public.
One of the most important
lessons learned in the 30 years that the North Slope and TAPS have been
operating is the importance of citizens' oversight groups to combat the
proven lethal combination of cost-cutting pressures, complacency and engineering
myopia. In 1996, this writer's review of TAPS operations for the Alaska
Forum for Environmental Responsibility included the recommendation that
the JPO Executive Council should be expanded to include three members
of the public. (30) In 2002, this writer's second review
of TAPS for AFER recommended establishment of an independent citizens'
oversight group. (31) Many environmental groups have endorsed
that recommendation. But the bureaucratic tide has been running the other
way. Monitors have joined the industry in opposing the establishment of
oversight groups for the North Slope and TAPS. And, as note above, the
JPO Executive Council didn't even meet for more than five years.
Against this backdrop,
the remarks of Jonne Slemmons, Coordinator of the State of Alaska's newly
established Petroleum Systems Integrity Office (PSIO), offered promise
of improved oversight. In addition to assisting in coordinating oversight
activities, the new office is charged with responsibility for conducting
a gap analysis of statutes and regulations, as well as ensuring that industry
quality assurance plans will guarantee systems integrity. In light of
the chronic shortcomings in pipeline oversight and the failure of the
JPO to convene an Executive Council meeting or publish a CMP report in
five years, it is a bit disconcerting that the new state unit adopted
the lease compliance monitoring template of the State Pipeline Coordinator's
Office, JPO's lead state agency. But the PSIO presentation was commendably
different in focus from other Executive Council presentations June 13
in this regard: Where the existing agencies tended to recite their successes,
the PSIO promised a much-needed look at how the monitors conduct their
jobs. It remains to be seen whether the PSIO is destined to become just
another acronym, or whether the Palin administration's new group will
join U.S. DOT's Barrett in taking a fresh look at how the petroleum industry
performs its tasks and making a hard run at ensuring top-level performance.
What was said -- and
left unsaid -- at the June 13 JPO Executive Council meeting demonstrates
that the government monitors responsible for ensuring safe and environmentally
sound pipeline operations in Alaska need to define their goals carefully
and then look at how they go about accomplishing them. If the mission
is to protect the public interest in safe and environmentally sound operations,
a primary task should be to ensure that the information from which the
members are working is consonant with reality.
Exiting the conference
room at day's end, some meeting participants some of the participants
paused at the door to look out over Knik Arm, across the vast, flat expanse
to the Alaska Range, shining in the distance. As their eyes adjusted to
the bright, late afternoon sunlight, did any of them stop to reflect that
they had spent the day in a windowless room?
__________
Endnotes
* Minor proofreading
corrections posted July 26, 2007.
1. JPO's last CMP
report, TAPS Maintenance & Sustained Useful Life (CMP-02-C-002;
Report #12), was published in June 2002. Agency personnel say they are
in the process of preparing one or more CMP reports at this time.
2. Office of the Inspector
General, "Survey Report: Oversight Activities of the Trans-Alaska
Pipeline System, Bureau of Land Management," U.S. Department of the
Interior, February 2001, pp. 6-8 (Report No. 01-I-206).
3. Among other actions,
BLM said it would permanently assign a writer/editor to JPO "to better
document supporting evidence for external reports" ("Response
to Draft Survey Report on Oversight Activities of the Trans-Alaska Pipeline
system, Bureau of Land Management [C-IN_BLM-022-99-R]," Nov. 3, 2000,
p. 2 [memo to Assistant Inspector General for Audit from Tom Fry, Director,
Bureau of Land Management, through Sylvia V. Baca, Assistant Secretary,
Land and Minerals Management]).
4. Richard A. Fineberg,
The Emperor's
New Hose: How Big Oil Gets Rich Gambling with Alaska's Environment
(Alaska Forum for Environmental Responsibility), 2002, pp. 21-68.
5. Richard A. Fineberg,
Pipeline
in Peril: A Status Report on the Trans-Alaska Pipeline (Alaska
Forum for Environmental Responsibiity), 1996, pp. 5.1-5.33 and 12.23-12.26;
and "Opportunity Lost," (2004 review article published here
["Oilpatch / Trans-Alaska Pipeline: Environment"]
with supporting documents).
6. See: Richard A.
Fineberg, "Public
Comment on Draft Environmental Impact Statement, Renewal of the Federal
Grant for the Trans-Alaska Pipeline System Right-of-Way (BLM/AK/PT-02/026+2880+990,
U.S. Department of Interior, Bureau of Land Management, July 2002) and
Commissioner's Statement of Reasons and Proposed Written Determination
for the Renewal of the Trans-Alaska Pipeline Right-of-Way Lease (ADL 63574,
July 5, 2002)," Aug. 20, 2002 (written comments submitted for
the Alaska Forum for Environmental Responsibility, the Alaska Center for
the Environment and the Northern Alaska Environmental Center); and State
of Alaska Governor's Office, "Murkowski
Joins Norton for TAPS ROW Signing," Jan. 8, 2003 (press release).
7. According to JPO's
mission statement, " Safety, environmental protection, pipeline integrity,
and regulatory compliance will be achieved through partnering with industry"
(JPO web site [accessed July 14, 2007 at http://www.jpo.doi.gov/JPO/locations.htm]).
8. The difference
between what JPO says and what it does can be seen in the frequency of
its so-called weekly reports. Over the seven years between January 2000
and the end of 2006, JPO issued an average of 26 weekly reports per year.
In other words, its weekly report was issued, on average, once every two
weeks. During this 84-month period, JPO issued four weekly reports in
the same month only seven times. At the other end of the scale, there
were four months in which none were released and 18 months in which one
weekly report was issued. (See: JPO weekly reports, posted at http://www.jpo.doi.gov/Publications/weeklyrpts.htm
[accessed July 14, 2007].)
9. "Re: Conditional
Approval of Alyeska's Strategic Reconfiguration Preliminary Design Submission
(APSC Letter #210)," (letter from Jerry Brossia [Authorized Officer,
BLM/OPM] and John Kerrigan [State Pipeline Coordinator, ADNR/SPCO] to
Rob Shoaf [JPO Executive Liaison, Alyeska Pipeline Service Company]),
Dec. 16, 2003 (with 28-page attachment).
10. See, for example,
Ernst & Young, "Project Planning & Risk" (http://www.ey.com/global/content.nsf/UK/IS_-_ITG_-_project
[accessed July 14, 2007]): "Getting project planning and risk management
right are critical contributors to the delivery of successful programmes,
yet these activities are often rushed or receive lip service only in the
race to be seen making positive progress on major programmes."
11. Letter to Robert
I. Shoaf (JPO Executive Liaison, Alyeska Pipeline Service Co.) from Jerry
Brossia (Authorized Office, JPO/OMP),"Re: Pipeline Oil Spill Contingency
Plan Review -- Annual Approval Including Approval of Strategic Reconfiguration
Amendments," Dec. 31, 2003; and Letter to Robert I. Shoaf (JPO Executive
Liaison, Alyeska Pipeline Service Co.) from Bill Hutmacher (Program Manager,
Alaska Department of Environmental Conservation, Divisioin of Spill Prevention
and Response), "Oil Discharge Prevention and Congingency Plan Amendment
Approval. See also: U.S. Dept. of the Interior, Bureau of Land Management,
"Finding of No Significant Impacts and Decision Record," Environmental
Assessment of the Proposed Reconfiguration of the Trans-Alaska Pipeline
System (EA No. EA-03-009), Jan. 30, 2004.
12. Alyeska Pipeline
Service Company, Pipeline Reconfiguration Project Overview: Pump Stations
and Colntrol Systems Upgrade -- Project Completion by End of 2005, March
2005, pp. 2, 4; and "$250 Million TAPS Upgrade Approved: Alyeska
starting biggest TAPS project since construction" (Alyeska Monthly
Newsletter, March 2004).
13, Alyeska Pipeline
Service Company, "Strategic Reconfiguration -- Final O&M Review
Agenda: Discussion Outline," May 23, 2005, pp. 9, 15.
14. Joint Pipeline
Office, 2004-2005 Annual Report, pp. 6, 28. A sampling of reports
reviewed for this report varied widely in depth and quality. One technical
report contained no information other than a ver batim reprint
of one of 130 conditions JPO attached to the oversight group's preliminary
project approval.
15. Alyeska Pipeline
Service Co., "Keeping You Posted" (e-mail message from Lee Monthei,
Strategic Reconfiguration Program Manager), circa March 2006.
16. Alyeska Pipeline
Service Co., "Keeping You Posted" (e-mail message from Kevin
Hostler, President), April 6, 2006.
17. This communication,
from an e-mail exchange between TAPS personnel, was typical of the way
exhausted field workers vented their frustration. (Since Malone had left
Alyeska in 2000 for other duties with BP and had just returned to the
U.S. as the head of BP North America, it is not clear that Malone was
responsible for SR budget cuts.)
18. Alyeska Pipeline
Service Co., "Keeping You Posted" (e-mail message from Kevin
Hostler, President), December 13, 2006.
19. For example, Al
Rogers, a former Exxon geologist who has spent the last decade examining
mega-project successes and failures, told the Legislature that "[t]he
primary thing you can do to guarantee difficulty in a project of this
magnitude is to try to accelerate the schedule. Schedule acceleration
is a high-risk endeavor in complex mega-projects." According to Rogers,
proceeding ahead without resolving questions about diverse issues is a
recipe for failure. The antidote? Font-end planning to identify problems
before they occur and cascade will enable project managers to figure out
what can go wrong and plan on mitigation strategies. (Al Rogers, Ph.D.,
testimony before the Alaska State Legislature, May 19, 2007, pp. 7-12.
Although Rogers was summarizing the statistical results of his examination
of international development mega-projects, in its complexity, dependence
on multinational contractors and application to a remote environment,
the TAPS SR project shares many elements in common with the larger projects
he studied (http://www.gov.state.ak.us/gasline/pdf/NL06-143%20-%20%20AkLegis%20-%20Gas%20Pipeline%20-%2019May06.pdf
[accessed July 12, 2007]).
20. According to JPO:
. . . "It was reported in the January
10, 2007 Weekly Report that the Department of Labor Safety and Workforce
Development (DOLWD) Liaison was investigating a fire event at Pump Station
(PS) 9. An unexpected pipeline shutdown due to an unrelated event at Pump
Station 11 began relief operations at PS 9 diverting crude oil flow from
the pipeline to a relief tank during shutdown conditions. The relief of
crude oil from the pipeline surges into the relief tank results in displacement
of flammable vapors from the tank. Approximately one minute after the
shutdown initiated, a portable industrial heater, located near one of
the vents ignited the flammable crude vapors. The fire burned for approximately
five minutes and was extinguished when the pump station relief valves
closed. There were no injuries or damage to equipment.
. . . ."The DOLWD Liaison identified
a number of safety deficiencies and Alyeska Pipeline Service Company (APSC)
was found to be in noncompliance with the Federal Agreement and Grant
of Right-of-Way Section 16, Laws and Regulations and Stipulation 1.20,
Health and Safety as well as the State Right-of-Way Lease Stipulations
1.20, Health and Safety and 4.1, State Laws, Regulations, Permits and
Authorizations.
. . . ."APSC was directed to respond
to the investigation findings specifying any action taken as a result
of this accident or any plans to prevent future accidents." (JPO
Weekly Report, April 11, 2007.)
21. For background
on TAPS restart issues between 1995 and 2001, see: Pipeline in Peril,
pp. 6.8-6.10, 6.22 and 8.10-8.12; The Emperor's New Hose, pp. 27
and 72-75; and "Re: CPF No. 5-2002-503" (letter from James Reynolds,
U.S. Department of Transportation Office of Pipeline Safety, to James
Johnson, Vice President, Alyeska Pipeline Service Co., July 19, 2006,
pp. 5-6 [assessing a reduced fine of $15,000 for the violations of safe
operating procedures during the TAPS restart mishaps of Sept. 22, 2001;
http://ops.dot.gov/regions/west/CPF_NO_5-2002-5035.pdf, accessed July
12, 2007]).
22. For a discussion
BP's problems with its Prudhoe Bay leak detection system based on the
company's accident investigation report, see the author's Sept. 3, 2006
report, "Shocking?"
Evidence Mounts from Alaska and Elsewhere that BP's Inadequate North Slope
Performance Should Have Been No Surprise to Public Officials or Monitors
- North Slope Corrosion Problems Fit Industry Pattern: Substandard Performance
on the Trans-Alaska Pipeline and Elsewhere in Alaska Places Workers, Environment
and Nation's Oil Supply at Undue Risk (Alaska Forum for Environmental
Responsibility), pp. 7-8.
23. JPO Weekly Reports,
Jan. 10 and Jan. 24, 2007.
24. See: U.S. Department of the Interior, Renewal of the Federal Grant
for the Trans-Alaska Pipeline System Right-of-Way: Draft Environmental
Impact Statement, July 2002, Vol. 2, Sec. 4.2.2.6.3.
25. Cascadia Wildlands
Project, "Supplemental Request for Adjudicatory Hearing" (In
the Matter of Trans Alaska Pipeline System [TAPS] Pipeline Oil Discharge
Prevention and Contingency Plan [C-Plan] Amendment approval - ADEC Plan
No. 06-CP-4071), undated (circa May 17, 2007), pp. 4, 5 and 17; and "Response
to Opposition to Supplemental Request for Adjudicatory Hearing,"
July 2, 2007.
26. For background
on TAPS Corrosion Issues, see The Emperor's New Hose, pp. 52-56.
27. "Statement of Kevin Hostler," President and CEO, Alyeska
Pipeline Service Company, before the U.S. House Subcommittee on Oversight
and Investigations (Energy and Commerce Committee), Sept. 7, 2006.
28. Felicity Barringer,
"Device Breaks Up in Pipeline, and Search Is on for Lost Piece,"
New York Times, Feb. 3, 2007.
29. JPO Weekly Report,
Mar. 21, 2007.
30. Richard A. Fineberg,
Pipeline in Peril, p. ES-25.
31. The Emperor's
New Hose, pp. ES-4-5.
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